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Why Madagascar Vanilla Beans are so EXPENSIVE!

Madagascar vanilla beans are prized throughout the world for their flavor and quality. Last year, however, prices for these culinary favorites spiked up to unprecedented levels, with gourmet Madagascan Bourbon vanilla beans peaking out at over $600 for a single kilogram. With the island nation accounting for more than 70 percent of the world’s vanilla market, this price increase sent costs for consumers worldwide skyrocketing. Here’s what you need to know about why the price of premium Madagascan vanilla has shot up and what it will do in the years to come.

First, a Short History of the Vanilla Bean

Before jumping into the reasons for vanilla’s sudden price spike, let’s first explore the history of the plant and how it came to be grown in Madagascar in the first place. Although it is used throughout the world today, vanilla is originally native to Central and South America. The first humans to have used vanilla as a flavoring agent are believed to have been the Totonacs, an indigenous people of Eastern Mexico. When the Totonacs were conquered by the expanding Aztec Empire in the 15th century, the flavorful beans were adopted by the Aztecs. In the 16th century, the conquest of the Aztecs by Spanish conquistadors introduced vanilla to the peoples of the West. Over the centuries, the use of vanilla gradually spread throughout the Western world. England and France were relatively early adopters, with vanilla even being a noted favorite of Queen Elizabeth I. Interestingly, the French love of vanilla would ultimately lead to its reintroduction to the New World when Thomas Jefferson, then acting as an envoy of the new American government, discovered it in Paris in the 1780s. When Jefferson returned to the United States, he brought French vanilla beans back with him. Today, vanilla is used throughout the world as a flavoring agent for dishes of all sorts. As of 2016, global production of vanilla had reached an astounding 7,940 tons worth a total of approximately $773 million. The plant itself has also become much more widely distributed and is now grown in locations ranging from its native Mexico to China, Turkey, Indonesia, Uganda and of course Madagascar. Like the United States, Madagascar has France to thank for its connection to the vanilla plant, as cultivation began while the island was under French control. Indeed, the name Madagascar Bourbon vanilla itself is a reference to the French role in the island’s vanilla industry, as the French name for Madagascar and the islands that surround it was the Bourbon islands. 

How Is Madagascan Vanilla Grown and Processed?

Growing vanilla outside of its native range is a difficult process, owing to the absence of a natural pollinator known as the Melipona bee. This tiny bee is the exclusive pollinator of vanilla in the wild, and the pollen of the plant’s flowers cannot be spread by more ordinary pollinators. For this reason, all vanilla grown outside of the range of the Melipona bee must be carefully pollinated by hand. This is done by using a thin stick to break a membrane that separates the male and female parts of the flower. The process is laborious and must be repeated each day while the crop is flowering, as the flowers are only fertile for up to 12 hours after they bloom. Nine months after pollination takes place, the vanilla beans mature and are ready to be harvested. As with the pollination, the beans are harvested carefully by hand. Farmers then sell the mature vanilla beans to third-party processors who are responsible for curing them and ultimately moving them in a usable form onto the global market. The curing process used for Madagascan vanilla is somewhat different from those used in other parts of the world. The first step of the process is for the beans to be scalded in hot water, after which they are allowed to dry out under the sun. This process can be repeated for as long as eight days to make the rigid bean soft and pliable. Next, the beans are left out to dry in a shady spot for a period of up to three months, allowing them to slowly release part of their remaining moisture. A final drying step, known as conditioning, involves another period of up to three months of indoor air drying. The resulting Bourbon vanilla beans maintain a slightly higher water content than equivalents from Central America while still being dry enough to use.

Why Are Madagascan Beans Considered the Best Vanilla in the World?

Madagascar Bourbon vanilla is regarded as the ultimate vanilla due to its unique flavor profile. While all vanillas share the same basic taste, there is quite a bit of variation between beans grown in different regions. Vanilla that is grown in Madagascar is prized for a sweet, creamy flavor that is not quite equaled by the beans grown in any other country. Moreover, the flavor of Madagascar Bourbon vanilla lingers in the mouth, allowing it to be more easily used in dishes with other powerful flavors that would overwhelm lesser vanillas.

Gourmet Madagascan Bourbon Vanilla vs. Extract Grade Beans

While the beans sold whole and those used to make extracts come from the same plants, it’s important to understand that they are not exactly the same. Gourmet beans, known technically as Grade A, have a moisture content of 30-35 percent and are slightly heavier than lower-grade beans. To be considered of gourmet quality, the beans must also be visually appealing so that they can appear in high-end dishes as an ingredient. The Grade B beans used to make vanilla extract, on the other hand, contain 15-25 percent moisture, are somewhat lighter and may have visual imperfections that would not be acceptable in Grade A beans.

So, Just Why Is Madagascan Vanilla so Expensive These Days?

Given the intensive labor required to grow, pollinate, harvest and process vanilla, it should come as no surprise that the bean is inherently a bit expensive. That being said, the current pricing reflects the impact of a series of external events that have inflated costs far beyond their normal range. These events began in 2017, when a pair of cyclones struck the island and decimated that year’s vanilla crop. With supply severely reduced, prices quickly rose, setting off a chain reaction that would eventually lead to the even higher price tags we see on Madagascan vanilla today. As prices trended higher, vanilla theft became a major issue in Madagascar. As a result, farmers were forced to devise intricate systems for tracking their crops and preventing them from being sold illegally. Some even went so far as to individually mark each pod while it was still on the vine. The extra pressure from thieves and the extra labor required to prevent theft also contributed to higher production costs. Rampant speculation has played a role in vanilla’s explosive price increase. Exporters eager to procure vanilla have flooded the Madagascan market with cash advances for middlemen who are able to deliver the beans. Unfortunately, these middlemen are often the same thieves that the farmers are attempting to keep away from their operations. The speculation on vanilla beans has also caused many farmers to cut corners by harvesting before the beans are fully ripe, though the Madagascan government has recently taken action against this problem by setting and enforcing harvest dates. A final cause of the general price increase in vanilla can be found on the demand side of the price equation. In recent years, consumer demand for natural, premium ingredients has spiked. As part of this move toward higher-quality ingredients, a growing number of consumers and the businesses that supply their food have made the switch from artificial vanilla flavorings to real vanilla beans. This increase in demand, when paired with short supplies, made for a perfect storm of upward pressure on prices.

Will the Price Come Back Down?

While prices for Madagascan Bourbon vanilla remain extremely high, they have begun to trend downward somewhat in recent months. Coming of off last year’s high of over $800 per kilogram, Grade A prices has been trending down this year. This drop has mostly been a product of crop recovery as Madagascar’s vanilla farmers bring land back into production that was affected by the 2017 cyclones. As market conditions normalize, many experts predict that prices will continue to drop steadily.

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